What is Nickel Pig Iron?

Chinese Stainless Steel
China is the world largest producer and consumer of stainless steel. In 2007, China produced 26% of the global production and that figure is expected to grow over the next few years.

Demand for Nickel
Common stainless steel contains between 2-14% nickel.

In 2006, nickel prices started to surge because of China’s huge demand and China’s nickel supply was affected. An opportunity surfaced when Chinese stainless steel producers realised that they needed an alternative supply to nickel.

China Steel was one of the first to start producing the alternative, nickel pig iron (NPI), in 2006

Nickel Pig Iron (NPI)
Laterite nickel ore accounts for about two-thirds of the world’s nickel resources but is generally not used for producing refined pure nickel because of its low nickel content that ranges between 1 – 2%.

After a series of sintering and smelting processes, removing impurities such as phosphorus, sulphur and silicon to specification, the laterite nickel ore can be processed into nickel pig iron that contains between 4% - 13% nickel with Iron and other metals account for the balance.

Chinese stainless steel producers uses nickel pig iron, which they will add chromium and other materials, to produce 200 and 300 series stainless steel which accounts for more than 70% of total stainless steel production in China.

The future of Nickel Pig Iron
Chinese domestic growth demand for nickel and nickel pig iron far exceeds the increase in production of nickel in China over the next few years.

With the Chinese Government Steel Industry Restructuring Program, many nickel pig iron producers have been shut down due to poor environmental standards (China Steel's Linyi plant is environmentally certified).

Hence with demand still growing at a rapid rate and supply of nickel pig iron being substantially reduced, demand for nickel pig iron from producers like China Steel is very strong.